8-K/A 1 0001.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------ FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (date of earliest event reported) April 19, 1999 ------------ ADELPHIA COMMUNICATIONS CORPORATION (Exact name of Registrant as specified in its charter) Delaware 0-16014 23-2417713 (State or Other (Commission File Number) (I.R.S. Employer Jurisdiction of Identification Number) Incorporation) One North Main Street Coudersport, PA 16915-1141 (Address of principal executive offices) (Zip Code) ------------ Registrant's telephone number, including area code (814) 274-9830 Item 5. Other Events Purpose of Amendment: This amendment to the current report on Form 8-K/A is being filed for the purpose of amending the pro forma financial information contained in the current report on Form 8-K previously filed as Exhibit 99.05 by Adelphia Communications Corporation (the "Company") on April 20, 1999 with the Securities Exchange Commission ("SEC"). The pro forma financial information is being amended to reflect the restatement of previously reported financial results as more fully described in the Company's Annual Report on Form 10-K/A-2 filed on December 19, 2000. The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Statements included in this Form 8-K/A, which are not historical facts are forward-looking statements, such as information relating to the effect of future regulation, future capital commitments and the effects of competition. Such forward-looking information involves important risks and uncertainties that could significantly affect expected results in the future from those expressed in any forward-looking statements made by, or on behalf of, the Company. These "forward looking statements" can be identified by the use of forward looking terminology such as "believes," "expects," "may," "will," "should," "intends," or "anticipates" or the negative thereof and the variations thereon or comparable terminology, or by discussions of strategy that involves risks or uncertainties. These risks and uncertainties include, but are not limited to, uncertainties relating to economic conditions, acquisitions and divestitures, the availability and cost of capital, government and regulatory policies, the pricing and availability of equipment, materials, inventories and programming, product acceptance, the Company's ability to construct, expand and upgrade its networks, reliance on vendors, technological developments, and changes in the competitive environment in which the Company operates. Readers are cautioned that such forward-looking statements are only predictions, that no assurance can be given that any particular future results will be achieved, and that actual events or results may differ materially. For further information regarding these risks and uncertainties and their potential impact on the Company, see the prospectus and most recent prospectus supplement filed under Registration Statement No. 333-78027, under the caption "Risk Factors." In evaluating such statements, readers should specifically consider the various factors which could cause actual events or results to differ materially from those indicated by such forward-looking statements. Item 7. Financial Statements and Exhibits (c) Exhibits Exhibit No. Description ----------- ----------- 99.05 Unaudited pro forma condensed consolidated financial information for Adelphia Communications Corporation as of December 31, 1998 (as restated) and for the year ended March 31, 1998 and the nine months ended December 31, 1998(as restated). (Filed Herewith) SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date December 28, 2000 ADELPHIA COMMUNICATIONS CORPORATION (Registrant) /s/ Timothy J. Rigas By: ______________________________________ Timothy J. Rigas Executive Vice President, Treasurer and Chief Financial Officer EXHIBIT INDEX Exhibit No. Description ----------- ----------- 99.05 Unaudited pro forma condensed consolidated financial information for Adelphia Communications Corporation as of December 31, 1998(as restated) and for the year ended March 31, 1998 and the nine months ended December 31, 1998(as restated). (Filed Herewith) EXHIBIT 99.05 ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION The unaudited pro forma financial information presented on the following pages is derived from the historical financial statements of Adelphia Communications Corporation and subsidiaries ("Adelphia"), FrontierVision Partners, L.P. and subsidiaries ("FrontierVision"), Century Communications Corp. and subsidiaries ("Century"), Harron Communications Corp. and subsidiaries ("Harron") and Olympus Communications, L.P. and subsidiaries ("Olympus"). The unaudited pro forma condensed consolidated balance sheet information as of December 31, 1998 (as restated) gives pro forma effect to (i) the securities offerings completed by Adelphia and its 67% owned subsidiary, Hyperion Telecommunications, Inc. ("Hyperion") after December 31, 1998, (ii) the repurchase of Adelphia Class A common stock and Series C Cumulative Convertible preferred stock from subsidiaries of Florida Power and Light ("FPL") after December 31, 1998, (iii) the pending acquisitions of FrontierVision, Century, Harron and the interests in Olympus held by Telesat Cablevision, Inc. ("Telesat"), a subsidiary of FPL, and (iv) the intended securities offering to be completed prior to closing such acquisitions, as if all such transactions had been consummated on December 31, 1998. The unaudited pro forma condensed consolidated statements of continuing operations information for the year ended March 31, 1998 and the nine months ended December 31, 1998 (as restated) have been presented as if (i) the financing and securities offerings of Adelphia and Hyperion completed after April 1, 1997, including the securities offerings completed by Adelphia and Hyperion after December 31, 1998 as discussed above, (ii) the repurchase of Adelphia Class A common stock from FPL, (iii) the pending acquisitions of FrontierVision, Century, Harron and Telesat's interests in Olympus, and (iv) the intended securities offering to be completed prior to closing such acquisitions had all been consummated on April 1, 1997. The unaudited pro forma financial information gives effect to the pending acquisitions of FrontierVision, Century, Harron and Telesat's interests in Olympus under the purchase method of accounting and is based upon the assumptions and adjustments described in the accompanying notes to the unaudited pro forma condensed consolidated financial statements presented on the following pages. The allocations of the total purchase price for the acquisition of FrontierVision, Century, Harron and Telesat's interests in Olympus are based on preliminary estimates and are subject to final allocation adjustments. The pro forma adjustments do not reflect any operating efficiencies and cost savings that may be achievable with respect to the combined companies. The pro forma adjustments do not include any adjustments to historical revenues for any future price changes nor any adjustments to selling and marketing expenses for any future operating changes. The unaudited pro forma financial information is not necessarily indicative of the financial position or operating results that would have occurred had the stock repurchase, acquisitions and securities offerings been consummated on the dates for which such transactions are being given effect. The pro forma adjustments reflecting the consummation of the stock repurchase, acquisitions and securities offerings are based upon the assumptions set forth in the notes to the unaudited pro forma condensed consolidated financial statements. The unaudited pro forma condensed consolidated financial statements presented on the following pages should be read in conjunction with the audited and unaudited historical financial statements (including the notes thereto) of Adelphia and Olympus, which are contained in their respective annual reports on Form 10-K, as amended, and quarterly reports on Form 10-Q as amended, not included in this current report on Form 8-K/A, and of FrontierVision, Century and Harron, which are included in the current report on Form 8-K filed on April 20, 1999.
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET December 31, 1998 (Dollars in thousands) Adelphia Olympus FrontierVision Pro Forma Pro Forma Pro Forma Adelphia Olympus FrontierVision Century* Harron Adjustments Adjustments Adjustments (g) (a) (a) (a) (a) (b) (c) (d) ----------- ---------- -------------- ---------- -------- ----------- ----------- -------------- Assets: Property, plant and equipment-- net.............. $ 1,196,388 $ 355,470 $ 342,754 $ 564,415 $133,222 $ -- $ 24,568 $ -- Intangible assets--net...... 1,061,730 577,171 820,524 462,356 81,139 -- 104,913 943,408 Cash and cash equivalents...... 398,644 44,617 7,354 628,162 3,645 872,787 (108,000) (550,000) Investment in and amounts due from Olympus.......... 191,408 -- -- -- -- -- (191,408) -- Other assets-- net.............. 467,591 34,741 43,731 144,531 132,963 14,300 10,782 -- ----------- ---------- ---------- ---------- -------- --------- ---------- --------- Total assets.... $ 3,315,761 $1,011,999 $1,214,363 $1,799,464 $350,969 $ 887,087 $ (159,145) $ 393,408 =========== ========== ========== ========== ======== ========= ========== ========= Liabilities, Preferred Stock, Common Stock and Other Stockholders' Equity (Deficiency): Subsidiary debt.. $ 1,717,240 $ 726,982 $1,355,144 $2,037,582 284,179 $(312,150) $ -- $(234,002) Parent debt...... 1,810,212 -- -- -- -- 252,300 -- -- Deferred income taxes............ 109,609 40,951 11,856 3,278 9,626 -- -- -- Other liabilities...... 253,493 380,013 48,261 147,658 23,858 -- (319,833) 19,826 ----------- ---------- ---------- ---------- -------- --------- ---------- --------- Total liabilities..... 3,890,554 1,147,946 1,415,261 2,188,518 317,663 (59,850) (319,833) (214,176) ----------- ---------- ---------- ---------- -------- --------- ---------- --------- Minority interests........ 48,784 -- -- 73,888 1,000 -- -- -- ----------- ---------- ---------- ---------- -------- --------- ---------- --------- Hyperion Redeemable Exchangeable Preferred Stock.. 228,674 -- -- -- -- -- -- -- ----------- ---------- ---------- ---------- -------- --------- ---------- --------- Series A Cumulative Redeemable Exchangeable Preferred Stock.. 148,191 -- -- -- -- -- -- -- ----------- ---------- ---------- ---------- -------- --------- ---------- --------- Convertible preferred stock, common stock and other stockholders' equity (deficiency): Convertible preferred stock.. 1 -- -- -- -- 20 -- -- Common stock..... 421 -- -- 1,090 482 174 -- 70 Additional paid- in capital....... 738,102 -- -- 181,103 8,508 1,101,256 -- 406,616 Accumulated deficit.......... (1,738,966) -- -- (497,864) 23,316 (5,300) 24,741 -- Treasury stock at cost and other... -- -- -- (147,271) -- (149,213) -- -- Partners' deficiency....... -- (135,947) (200,898) -- -- -- 135,947 200,898 ----------- ---------- ---------- ---------- -------- --------- ---------- --------- Convertible preferred stock, common stock and other stockholders' equity (deficiency).... (1,000,442) (135,947) (200,898) (462,942) 32,306 946,937 160,688 607,584 ----------- ---------- ---------- ---------- -------- --------- ---------- --------- Total........... $ 3,315,761 $1,011,999 $1,214,363 $1,799,464 $350,969 $ 887,087 $ (159,145) $ 393,408 =========== ========== ========== ========== ======== ========= ========== =========
Century Harron Pro Forma Pro Forma Pro Forma Adelphia Adjustments Adjustments Consolidated (e) (f) (g) ------------ ------------ ------------- Assets: Property, plant and equipment-- net.............. $ 805,941 $ 188,473 $ 3,611,231 Intangible assets--net...... 4,323,765 1,131,579 9,506,585 Cash and cash equivalents...... (726,000) (336) 570,873 Investment in and amounts due from Olympus.......... -- -- -- Other assets-- net.............. -- (125,559) 723,080 ------------ ------------ ------------- Total assets.... $4,403,706 $1,194,157 $14,411,769 ============ ============ ============= Liabilities, Preferred Stock, Common Stock and Other Stockholders' Equity (Deficiency): Subsidiary debt.. $ 100,000 885,591 $ 6,560,566 Parent debt...... -- -- 2,062,512 Deferred income taxes............ 1,100,000 344,502 1,619,822 Other liabilities...... -- (2,630) 550,646 ------------ ------------ ------------- Total liabilities..... 1,200,000 1,227,463 10,793,546 ------------ ------------ ------------- Minority interests........ -- (1,000) 122,672 ------------ ------------ ------------- Hyperion Redeemable Exchangeable Preferred Stock.. -- -- 228,674 ------------ ------------ ------------- Series A Cumulative Redeemable Exchangeable Preferred Stock.. -- -- 148,191 ------------ ------------ ------------- Convertible preferred stock, common stock and other stockholders' equity (deficiency): Convertible preferred stock.. -- -- 21 Common stock..... (603) (482) 1,152 Additional paid- in capital....... 2,559,174 (8,508) 4,986,251 Accumulated deficit.......... 497,864 (23,316) (1,719,525) Treasury stock at cost and other... 147,271 -- (149,213) Partners' deficiency....... -- -- -- ------------ ------------ ------------- Convertible preferred stock, common stock and other stockholders' equity (deficiency).... 3,203,706 (32,306) 3,118,686 ------------ ------------ ------------- Total........... $4,403,706 $1,194,157 $14,411,769 ============ ============ ============= ----- *As of February 28, 1999.
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET December 31, 1998 (Dollars in thousands, except per share amounts) (a) Represents historical amounts. (b) Represents the net effects of: (i) sale on January 14, 1999 of 8,600,000 shares of Adelphia Class A common stock with net proceeds of approximately $371,450, which was used to repay subsidiary debt, (ii) the offering completed on January 13, 1999 of $100,000 of 7 1/2% Senior Notes due 2004 and $300,000 of 7 3/4% Senior Notes due 2009, with net proceeds of approximately $393,700 which was used to repay approximately $147,700 of parent debt and approximately $246,000 of subsidiary debt, (iii) the repurchase of Adelphia Class A common stock and Series C Cumulative Convertible preferred stock for a total of approximately $149,213 from FPL, (iv) the receipt of net proceeds from the intended securities offerings of approximately $200,000 of Adelphia 5 1/2% Convertible preferred stock, $300,000 of Adelphia Class A common stock at an assumed price of $64 per share and $250,000 of Adelphia Class B common stock at an assumed price of $64 per share less the underwriting discount and (v) the offering completed on March 2, 1999 by Hyperion of $300,000 of 12% Senior Subordinated Notes due 2007, with net proceeds of approximately $292,000 which will be used for acquisition of its local partners' interests, capital expenditures, investments in networks, and working capital and general corporate purposes. (c) Represents the net effects of Adelphia's purchase of Telesat's interests in Olympus for $108,000 and the associated preliminary adjustments to the historical balance sheet of Olympus recorded in conjunction with applying purchase accounting including an initial allocation of $28,237 and $112,946 of the purchase price to Property, plant and equipment--net and Intangible assets--net, respectively. The purchase by Adelphia of Telesat's interests in Olympus will result in the consolidation of Olympus with Adelphia; accordingly, this also includes elimination of all significant intercompany accounts and balances, reclassification of $10,782 of other affiliate receivables and the elimination of approximately $24,741 of accrued priority return expensed by Olympus but not recorded by Adelphia until received. (d) Represents the net effects of: (i) issuance of 7,000,000 shares of Adelphia Class A common stock at $58.10 per share, (ii) $550,000 cash portion of the acquisition, (iii) preliminary adjustments recorded in conjunction with applying purchase accounting including an initial allocation of $943,408 of the purchase price to Intangible assets--net, (iv) the elimination of $234,002 of affiliate debt not assumed in the acquisition and (v) certain other working capital adjustments. (e) Represents the net effects of (i) issuance of approximately 48,700,000 shares of Adelphia Class A common stock at $56.30 per share, (ii) $826,000 cash portion of the acquisition, a portion of which is assumed to be funded under Adelphia's subsidiaries' credit facilities, (iii) preliminary estimate of deferred tax liability impact due to acquisition and (iv) preliminary adjustments recorded in conjunction with applying purchase accounting including an initial allocation of $805,941 and $4,323,765 of the purchase price to Property, plant and equipment--net and Intangible assets--net, respectively. (f) Represents the net effects of: (i) $1,169,770 cash acquisition funded through additional borrowings under Adelphia's subsidiaries' credit facilities, net of repayment of existing Harron subsidiary debt, (ii) non- cable television assets excluded from the acquisition, (iii) preliminary adjustments recorded in conjunction with applying purchase accounting including an initial allocation of $196,858 and $1,131,936 of the purchase price to Property, plant and equipment--net and Intangible assets--net, respectively and (iv) preliminary estimate of deferred tax liability impact due to acquisition. (g) The historical and pro forma financial information has been amended to reflect the restatement of previously reported financial results as more fully described in the Company's Annual Report on Form 10-K/A-2 filed on December 19, 2000.
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF CONTINUING OPERATIONS Year Ended March 31, 1998 (Dollars in thousands, except per share amounts) Adelphia Olympus FrontierVision Adelphia Olympus* FrontierVision* Century** Harron* Pro Forma Pro Forma Pro Forma (a) (a) (a) (a) (a) Adjustments Adjustments Adjustments --------- --------- --------------- --------- -------- ----------- ----------- -------------- Revenues......... $ 524,889 $ 176,363 $145,126 $ 484,736 $112,127 $ -- $ -- $ -- --------- --------- -------- --------- -------- ------- ------- ------- Operating expenses: Direct operating and programming..... 167,288 56,905 74,314 103,932 42,982 -- -- (21,873)(l) Selling, general and administrative.. 95,731 41,729 4,418 122,307 26,044 9,715(b) (9,566)(i) 21,873 (l) Depreciation and amortization.... 145,041 43,337 65,627 154,029 19,852 -- 5,647 (j) 12,746 (m) --------- --------- -------- --------- -------- ------- ------- ------- Total........... 408,060 141,971 144,359 380,268 88,878 9,715 (3,919) 12,746 --------- --------- -------- --------- -------- ------- ------- ------- Operating income (loss)........... 116,829 34,392 767 104,468 23,249 (9,715) 3,919 (12,746) --------- --------- -------- --------- -------- ------- ------- ------- Other income (expense) Priority investment income from Olympus......... 47,765 -- -- -- -- (47,765)(c) -- -- Interest expense--net.... (243,554) (56,750) (70,430) (172,608) (5,658) (36,041)(d) 6,600(k) 22,264(n) Equity in loss of Olympus and other joint ventures.. (66,089) -- -- -- -- 58,627(e) -- -- Equity in loss of Hyperion joint ventures.. (12,967) -- -- -- -- -- -- -- Minority interest in income of subsidiaries.... -- -- -- (11,899) -- -- -- -- Hyperion preferred stock dividends....... (12,682) -- -- -- -- (14,439)(f) -- -- Gain on sale of assets.......... 2,538 1,522 -- -- 11,973 -- -- -- Other........... -- 1,085 (57) 1,533 478 -- -- -- --------- --------- -------- --------- -------- ------- ------- ------- Total........... (284,989) (54,143) (70,487) (182,974) 6,793 (39,618) 6,600 22,264 --------- --------- -------- --------- -------- ------- ------- ------- (Loss) income before income taxes and extraordinary loss.. (168,160) (19,751) (69,720) (78,506) 30,042 (49,333) 10,519 9,518 Income tax benefit (expense)........ 5,606 (51) -- 624 (12,215) 169,097(g) -- -- --------- --------- -------- --------- -------- ------- ------- ------- (Loss) income from continuing operations....... (162,554) (19,802) (69,720) (77,882) 17,827 119,764 10,519 9,518 Dividend requirements applicable to preferred stock.. (18,850) -- -- -- -- (19,775)(h) -- -- --------- --------- -------- --------- -------- ------- ------- ------- (Loss) income applicable to common stockholders from continuing operations....... $(181,404) $ (19,802) $(69,720) $ (77,882) $ 17,827 $99,989 $10,519 $ 9,518 ========= ========= ======== ========= ======== ======= ======= ======= Basic and diluted loss from continuing operations per weighted average share of common stock ................. $ (6.07) ========= Weighted average shares of common stock outstanding (in thousands)... 29,875 =========
Century Harron Pro Forma Pro Forma Pro Forma Adelphia Adjustments Adjustments Consolidated ------------- -------------- -------------- Revenues......... $ 123,605(o) $ (8,801)(q) $1,558,045 ------------- -------------- -------------- Operating expenses: Direct operating and programming..... 131,792(o) (4,035)(q) 551,305 Selling, general and administrative.. -- (4,445)(q) 307,806 Depreciation and amortization.... 102,659(p) 46,437(r) 595,375 ------------- -------------- -------------- Total........... 234,451 37,957 1,454,486 ------------- -------------- -------------- Operating income (loss)........... (110,846) (46,758) 103,559 ------------- -------------- -------------- Other income (expense) Priority investment income from Olympus......... -- -- -- Interest expense--net.... 8,187(o) (70,158)(q) (618,148) Equity in loss of Olympus and other joint ventures.. -- -- (7,462) Equity in loss of Hyperion joint ventures.. -- -- (12,967) Minority interest in income of subsidiaries.... -- -- (11,899) Hyperion preferred stock dividends....... -- -- (27,121) Gain on sale of assets.......... -- -- 16,033 Other........... -- (5,696)(q) (2,657) ------------- -------------- -------------- Total........... 8,187 (75,854) (664,221) ------------- -------------- -------------- (Loss) income before income taxes and extraordinary loss.. (102,659) (122,612) (560,662) Income tax benefit (expense)........ -- 4,649(q) 167,710 ------------- -------------- -------------- (Loss) income from continuing operations....... (102,659) (117,963) (392,952) Dividend requirements applicable to preferred stock.. -- -- (38,625) ------------- -------------- -------------- (Loss) income applicable to common stockholders from continuing operations....... $(102,659) $(117,963) $ (431,577) ============= ============== ============== Basic and diluted loss from continuing operations per weighted average share of common stock ................. $ (3.91)(s) ============== Weighted average shares of common stock outstanding (in thousands)... 110,423(s) ============== ----- *Year ended December 31, 1997. **Year ended May 31, 1998.
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF CONTINUING OPERATIONS Year Ended March 31, 1998 (Dollars in thousands) (a) Represents historical amounts. (b) Represents the elimination of allocated overhead costs to Olympus. (c) Represents the elimination of priority investment income from Olympus. (d) Gives effect to the application of the net proceeds of (i) approximately $292,000 from the March 2, 1999 12% Senior Subordinated Notes issued by Hyperion, (ii) approximately $371,450 from the January 14, 1999 offering of 8,600,000 shares of Adelphia Class A common stock, (iii) approximately $393,700 from the January 13, 1999 7 1/2% and 7 3/4% Senior Notes issued by Adelphia, (iv) $330,000 from the financing of the Western New York Partnership, (v) approximately $268,000 from the 1998 offering of 8,805,315 shares of Adelphia Class A common stock, and (vi) approximately $244,000 from the August 27, 1997 offering of 12 1/4% Senior Secured Notes issued by Hyperion, as if such transactions had occurred April 1, 1997. Also gives effect to the elimination of $6,600 of interest income received from Olympus. (e) Represents the elimination of equity in loss of Olympus. (f) Gives effect to an increase in Hyperion preferred stock dividends as if the October 1997 issuance of $200,000 12 7/8% Senior Exchangeable Preferred Stock had occurred on April 1, 1997. (g) Represents the estimated income tax provision after giving effect to the pending acquisitions of FrontierVision, Century, Harron, and Olympus and related pro forma adjustments. (h) Gives effect to an increase in Adelphia preferred stock dividends as if the July 7, 1997 issuance of $150,000 of 13% Cumulative Exchangeable Preferred Stock and $100,000 of 8 1/8% Series C Cumulative Convertible preferred stock and the intended sale of $200,000 of Adelphia 5 1/2% Convertible preferred stock as if they had occurred on April 1, 1997. (i) Represents the elimination of allocated overhead costs from Adelphia. (j) Represents the additional depreciation and amortization expense resulting from the acquisition of Olympus. Pro forma depreciation and amortization is calculated on a straight-line basis over periods that are consistent with Adelphia's depreciation and amortization periods. The cost basis of the purchased assets utilized in these calculations is based on preliminary asset allocations among property, plant and equipment (primarily operating plant and equipment depreciated over 5-12 years) and intangible assets (primarily purchased franchises and goodwill amortized over 40 years) and is subject to final allocation adjustments. (k) Represents the elimination of interest expense paid to Adelphia. (l) Represents reclassification between direct operating and programming and selling, general and administrative expenses to conform with Adelphia's presentation. (m) Represents the additional depreciation and amortization expense resulting from the acquisition of FrontierVision. Pro forma depreciation and amortization is calculated on a straight-line basis over periods that are consistent with Adelphia's accounting policy. The cost basis of the purchased assets utilized in these calculations is based on a preliminary asset allocation to intangible assets (primarily purchased franchises and goodwill amortized over 40 years) and is subject to final allocation adjustments. Additionally, amount represents pro forma reduction of depreciation and amortization expense to adjust historical expense amounts to Adelphia's depreciation and amortization periods. (n) Represents the elimination of affiliate interest expense paid by FrontierVision on affiliate debt not assumed in the acquisition. (o) Represents reclassification of programming expense from a reduction of revenues to direct operating and programming expense and reclassification of interest income from revenues to a decrease in interest expense--net to conform to Adelphia's presentation. (p) Represents the additional depreciation and amortization expense resulting from the acquisition of Century. Pro forma depreciation and amortization is calculated on a straight-line basis over periods that are consistent with Adelphia's accounting policy. The cost basis of the purchased assets utilized in these calculations is based on preliminary asset allocations among property, plant and equipment (primarily operating plant and equipment depreciated over 5-12 years) and intangible assets (primarily purchased franchises and goodwill amortized over 40 years) and is subject to final allocation adjustments. Additionally, amount represents pro forma reduction of depreciation and amortization expense to adjust historical expense amounts to Adelphia's depreciation and amortization periods. (q) Represents amounts resulting from the non-cable television operations excluded from the acquisition and the incremental interest expense incurred from additional borrowings under Adelphia's subsidiaries' credit facilities to fund the acquisition. (r) Represents the net effect of depreciation and amortization expense of non- cable television assets excluded from the acquisition and the additional depreciation and amortization expense resulting from the acquisition of Harron. Pro forma depreciation and amortization is calculated on a straight-line basis over periods that are consistent with Adelphia's accounting policy. The cost basis of the purchased assets utilized in these calculations is based on preliminary asset allocations among property, plant and equipment (primarily operating plant and equipment depreciated over 5-12 years) and intangible assets (primarily purchased franchises and goodwill amortized over 40 years) and is subject to final allocation adjustments. (s) Gives effect to the repurchase and issuance of Class A common stock in connection with: (i) the repurchase of approximately 1,091,524 shares from FPL, (ii) 8,600,000 shares issued January 14, 1999, (iii) 8,805,315 shares issued in the 1998 offering, (iv) 7,000,000 shares to be issued in the FrontierVision acquisition, (v) approximately 48,700,000 shares to be issued in the Century acquisition, (vi) approximately 8,777,814 shares estimated to be issued in the intended offering to be completed prior to closing the acquisitions of FrontierVision, Century, Harron and Telesat's interest in Olympus, as if such transactions had been consummated on April 1, 1997. Diluted loss from continuing operations per common share is equal to basic loss from continuing operations per common share because Adelphia's existing and expected convertible preferred stock had or would have an antidilutive effect; however, the convertible preferred stock could have a dilutive effect on earnings per share in future periods.
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF CONTINUING OPERATIONS Nine Months Ended December 31, 1998 (Dollars in thousands, except per share amounts) Adelphia Olympus Adelphia Olympus FrontierVision Century* Harron Pro Forma Pro Forma (s) (a) (a) (a) (a) Adjustments Adjustments --------- -------- -------------- --------- ------- ----------- ----------- Revenues........ $ 496,014 $164,724 $191,315 $ 387,726 $93,548 $ -- $ -- --------- -------- -------- --------- ------- ------- -------- Operating expenses: Direct operating and programming.... 167,963 56,586 95,907 85,284 36,728 -- -- Selling, general and administrative.. 107,249 39,153 5,216 87,696 23,424 10,456(b) (10,456)(h) Depreciation and amortization... 140,974 39,683 90,608 125,864 16,702 -- 4,235(i) --------- -------- -------- --------- ------- ------- -------- Total.......... 416,186 135,422 191,731 298,844 76,854 10,456 (6,221) --------- -------- -------- --------- ------- ------- -------- Operating income (loss).......... 79,828 29,302 (416) 88,882 16,694 (10,456) 6,221 --------- -------- -------- --------- ------- ------- -------- Other income (expense) Priority investment income from Olympus........ 36,000 -- -- -- -- (36,000)(c) -- Interest expense--net... (180,452) (48,129) (88,667) (143,830) (9,079) (26,829)(d) 7,932(j) Equity in (loss) income of Olympus and other joint ventures....... (48,891) -- -- -- -- 49,005(e) -- Equity in loss of Hyperion joint ventures....... (9,580) -- -- -- -- -- -- Minority interest in losses (income) of subsidiaries... 25,772 -- -- (9,334) -- -- -- Hyperion preferred stock dividends...... (21,536) -- -- -- -- -- -- Gain on cable systems swap..... 21,455 -- -- -- -- -- -- Gain on sale of assets......... -- 7,215 -- 5,186 -- -- -- Other.......... 1,113 316 (398) -- 5,354 -- -- --------- -------- -------- --------- ------- ------- -------- Total.......... (176,119) (40,598) (89,065) (147,978) (3,725) (13,824) 7,932 --------- -------- -------- --------- ------- ------- -------- (Loss) income before income taxes and extraordinary loss.. (96,291) (11,296) (89,481) (59,096) 12,969 (24,280) 14,153 Income tax benefit (expense)....... 6,802 (115) 2,927 19,104 7,345 72,124(f) -- --------- -------- -------- --------- ------- ------- -------- (Loss) income from continuing operations...... (89,489) (11,411) (86,554) (39,992) 20,314 47,844 14,153 Dividend requirements applicable to preferred stock.. (20,718) -- -- -- -- (8,250)(g) -- --------- -------- -------- --------- ------- ------- -------- (Loss) income applicable to common stockholders from continuing operations...... $(110,207) $(11,411) $(86,554) $ (39,992) $20,314 $39,594 $ 14,153 ========= ======== ======== ========= ======= ======= ======== Basic and diluted loss from continuing operations per weighted average share of common stock ................ $ (3.04) ========= Weighted average shares of common stock outstanding (in thousands).. 36,226 =========
FrontierVision Century Harron Pro Forma Pro Forma Pro Forma Pro Forma Adelphia Adjustments Adjustments Adjustments Consolidated (s) --------------- ------------- -------------- --------------- Revenues........ $ -- $ 98,208(n) $ (6,688)(p) $1,424,847 --------------- ------------- -------------- --------------- Operating expenses: Direct operating and programming.... (35,242)(k) 111,445(n) (3,211)(p) 515,460 Selling, general and administrative.. 35,242(k) -- (2,950)(p) 295,030 Depreciation and amortization... (31,828)(l) 66,652(o) 35,228(q) 488,118 --------------- ------------- -------------- --------------- Total.......... (31,828) 178,097 29,067 1,298,608 --------------- ------------- -------------- --------------- Operating income (loss).......... 31,828 (79,889) (35,755) 126,239 --------------- ------------- -------------- --------------- Other income (expense) Priority investment income from Olympus........ -- -- -- -- Interest expense--net... 19,570(m) 13,237(n) (47,783)(p) (504,030) Equity in (loss) income of Olympus and other joint ventures....... -- -- -- 114 Equity in loss of Hyperion joint ventures....... -- -- -- (9,580) Minority interest in losses (income) of subsidiaries... -- -- -- 16,438 Hyperion preferred stock dividends...... -- -- -- (21,536) Gain on cable systems swap..... -- -- -- 21,455 Gain on sale of assets......... -- -- -- 12,401 Other.......... -- -- (7,018)(p) (633) --------------- ------------- -------------- --------------- Total.......... 19,570 13,237 (54,801) (485,371) --------------- ------------- -------------- --------------- (Loss) income before income taxes and extraordinary loss.. 51,398 (66,652) (90,556) (359,132) Income tax benefit (expense)....... -- -- (8,390)(p) 99,797 --------------- ------------- -------------- --------------- (Loss) income from continuing operations...... 51,398 (66,652) (98,946) (259,335) Dividend requirements applicable to preferred stock.. -- -- -- (28,968) --------------- ------------- -------------- --------------- (Loss) income applicable to common stockholders from continuing operations...... $51,398 $(66,652) $(98,946) $ (288,303) =============== ============= ============== =============== Basic and diluted loss from continuing operations per weighted average share of common stock ................ $ (2.57)(r) =============== Weighted average shares of common stock outstanding (in thousands).. 112,242(r) =============== ----- *Nine months ended February 28, 1999.
ADELPHIA COMMUNICATIONS CORPORATION AND SUBSIDIARIES NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF CONTINUING OPERATIONS Nine Months Ended December 31, 1998 (Dollars in thousands) (a) Represents historical amounts. (b) Represents the elimination of allocated overhead costs to Olympus. (c) Represents the elimination of priority investment income from Olympus. (d) Gives effect to the application of the net proceeds of (i) approximately $292,000 from the March 2, 1999 12% Senior Subordinated Notes issued by Hyperion, (ii) approximately $371,450 from the January 14, 1999 offering of 8,600,000 shares of Adelphia Class A common stock, (iii) approximately $393,700 from the January 13, 1999 7 1/2% and 7 3/4% Senior Notes issued by Adelphia, (iv) $330,000 from the financing of the Western New York Partnership and (v) approximately $268,000 from the 1998 offering of 8,805,315 shares of Adelphia Class A common stock as if such transactions had occurred April 1, 1997. Also gives effect to the elimination of $7,932 of interest income received from Olympus. (e) Represents the elimination of equity in loss of Olympus. (f) Represents the estimated income tax provision after giving effect to the pending acquisitions of FrontierVision, Century, Harron, and Olympus and related pro forma adjustments. (g) Gives effect to the intended issuance of $200,000 of Adelphia 5 1/2% convertible preferred stock as if such issuance had occurred on April 1, 1997. (h) Represents the elimination of allocated overhead costs from Adelphia. (i) Represents the additional depreciation and amortization expense resulting from the acquisition of Olympus. Pro forma depreciation and amortization is calculated on a straight-line basis over periods that are consistent with Adelphia's accounting policy. The cost basis of the purchased assets utilized in these calculations is based on preliminary asset allocations among property, plant and equipment (primarily operating plant and equipment depreciated over 5-12 years) and intangible assets (primarily purchased franchises and goodwill amortized over 40 years) and is subject to final allocation adjustments. (j) Represents the elimination of interest expense paid to Adelphia. (k) Represents reclassification between direct operating and programming and selling, general and administrative expenses to conform with Adelphia's presentation. (l) Represents pro forma reduction of FrontierVision historical depreciation and amortization expense to conform to Adelphia's depreciation and amortization periods net of additional depreciation and amortization expense resulting from the acquisition of FrontierVision. Pro forma depreciation and amortization is calculated on a straight-line basis over periods that are consistent with Adelphia's accounting policy. The cost basis of the purchased assets utilized in these calculations is based on a preliminary asset allocation to intangible assets (primarily purchased franchises and goodwill amortized over 40 years) and is subject to final allocation adjustments. (m) Represents the elimination of affiliate interest expense paid by FrontierVision on affiliate debt not assumed in the acquisition. (n) Represents reclassification of programming expense from a reduction of revenues to direct operating and programming expense and reclassification of interest income from revenues to a decrease in interest expense--net to conform to Adelphia's presentation. (o) Represents the additional depreciation and amortization expense resulting from the acquisition of Century. Pro forma depreciation and amortization is calculated on a straight-line basis over periods that are consistent with Adelphia's depreciation and amortization periods. The cost basis of the purchased assets utilized in these calculations is based on preliminary asset allocations among property, plant and equipment (primarily operating plant and equipment depreciated over 5-12 years) and intangible assets (primarily purchased franchises and goodwill amortized over 40 years) and is subject to final allocation adjustments. Additionally, amount represents pro forma reduction of depreciation and amortization to adjust historical expense amounts to Adelphia's depreciation and amortization periods. (p) Represents the non-cable television operations excluded from the acquisition and the incremental interest expense incurred from additional borrowings under Adelphia's subsidiaries' credit facilities to fund the acquisition. (q) Represents the net effect of depreciation and amortization expense of non- cable television assets excluded from the acquisition and the additional depreciation and amortization expense resulting from the acquisition of Harron. Pro forma depreciation and amortization is calculated on a straight-line basis over periods that are consistent with Adelphia's accounting policy. The cost basis of the purchased assets utilized in these calculations is based on preliminary asset allocations among property, plant and equipment (primarily operating plant and equipment depreciated over 5-12 years) and intangible assets (primarily purchased franchises and goodwill amortized over 40 years) and is subject to final allocation adjustments. (r) Gives effect to the repurchase and issuance of Class A common stock in connection with: (i) the repurchase of approximately 1,091,524 shares from FPL, (ii) 8,600,000 shares issued January 14, 1999, (iii) 8,805,315 shares issued in the 1998 offering, (iv) 7,000,000 shares to be issued in the FrontierVision acquisition, (v) approximately 48,700,000 shares to be issued in the Century acquisition and (vi) approximately 8,777,814 shares estimated to be issued in the intended offering to be completed prior to closing the acquisitions of FrontierVision, Century, Harron and Telesat's interest in Olympus, as if such transactions had been consummated on April 1, 1997. Diluted loss from continuing operations per common share is equal to basic loss from continuing operations per common share because Adelphia's existing and expected convertible preferred stock had or would have an antidilutive effect; however, the convertible preferred stock could have a dilutive effect on earnings per share in future periods. (s) The historical and pro forma financial information has been amended to reflect the restatement of previously reported financial results as more fully described in the Company's Annual Report on Form 10-K/A-2 filed on December 19, 2000.